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Case Study 1

BUSINESS PROBLEM-SOLVING CASE A New Look at Electronic Medical Records

During a typical trip to the doctor, you’ll often see shelves full of folders and papers devoted to the storage of medical records. Every time you visit, your records are created or modified, and often duplicate copies are generated throughout the course of a visit to the doctor or a hospital. The majority of medical records are currently paper-based, making these records very difficult to access and share. It has been said that the U.S. health care industry is the world’s most inefficient information enterprise.

Inefficiencies in medical record keeping are one reason why health care costs in the United States are the highest in the world. In 2012 health care costs reached $2.8 trillion, representing 18 percent of the U.S. gross domestic product (GDP). Left unchecked, by 2037 health care costs will rise to 25% of GDP and consume approximately 40 percent of total federal spending. Since administrative costs and medical recordkeeping account for nearly 13 percent of U.S. health care spending, improving medical recordkeeping systems has been targeted as a major path to cost savings and even higher health care quality. Enter electronic medical record (EMR) systems.

An electronic medical record system contains all of a person’s vital medical data, including personal information, a full medical history, test results, diagnoses, treatments, prescription medications, and the effect of those treatments. A physician would be able to immediately and directly access needed information from the EMR without having to pore through paper files. If the record holder went to the hospital, the records and results of any tests performed at that point would be immediately available online. Having a complete set of patient information at their fingertips would help physicians prevent prescription drug interactions and avoid redundant tests. Many experts believe that electronic records will reduce medical errors and improve care, create less paperwork, and provide quicker service, all of which will lead to dramatic savings in the future, as much as $80 billion per year.

The U.S. government’s short-term goal is for all health care providers in the United States to have EMR systems in place that meet a set of basic functional criteria by the year 2015. Its long-term goal is to have a fully functional nationwide electronic medical recordkeeping network. The consulting firm Accenture estimated that 50 percent of U.S. hospitals are potentially at risk of incurring penalties by 2015 for failing to meet federal requirements.

Evidence of EMR systems in use today suggests that electronic records offer significant advantages to hospitals and patients alike. The U.S. Veterans Affairs (VA) system of doctors and hospitals is considered a leading example. The VA system switched to digital records years ago, and far exceeds the private sector and Medicare in quality of preventive services and chronic care. The VA also provides the lowest cost health care in the nation. The 1,400 VA facilities use VistA, record-sharing software developed by the government that allows doctors and nurses to share patient history. A typical VistA record lists all of the patient’s health problems; their weight and blood pressure since beginning treatment at the VA system; images of the patient’s x-rays, lab results, and other test results; lists of medications; and reminders about upcoming appointments.

VistA has many features that improve quality of care. For example, nurses scan tags for patients and medications to ensure that the correct dosages of medicines are going to the correct patients. This feature reduces medication errors, which is one of the most common and costly types of medical errors, and speeds up treatment as well. The system also generates automatic warnings based on specified criteria. It can notify providers if a patient’s blood pressure goes over a certain level or if a patient is overdue for a regularly scheduled procedure like a flu shot or a cancer screening. Devices that measure patients’ vital signs can automatically transmit their results to the VistA system, which automatically updates doctors at the first sign of trouble. The 40,000 patients in the VA’s in-home monitoring program reduced their hospital admissions by 25 percent and the length of their hospital stays by 20 percent.

Patients also report that the process of being treated at the VA is effortless compared to paper-based providers. That’s because instant processing of claims and payments are among the benefits of EMR systems. Insurance companies traditionally pay claims around two weeks after receiving them, despite quickly processing them soon after they are received; governmental regulations only require insurers to pay claims within fifteen days of their receipt. Additionally, today’s paper-based health care providers must assign the appropriate diagnostic codes and procedure codes to claims. Because there are thousands of these codes, the process is even slower, and most providers employ someone solely to perform this task. Electronic systems hold the promise of immediate processing, or “real-time claims adjudication” just like when you pay using a credit card, because claim data would be sent immediately and diagnostic and procedure code information are automatically entered.

Economic stimulus money provided by the American Recovery and Reinvestment Act has been available to health care providers in two ways. First, $2 billion was provided up front to hospitals and physicians to help set up electronic records. Another $17 billion was available to reward providers that successfully implement electronic records by 2015. To qualify for these rewards, providers must demonstrate “meaningful use” of electronic health record systems. The bill defines this as the successful implementation of certified e-record products, the ability to write at least 40 percent of all prescriptions electronically, and the ability to exchange and report data to government health agencies.

In addition to stimulus payments, the federal government plans to assess penalties on practices that fail to comply with the new electronic recordkeeping standards. Providers that cannot meet the standards by 2015 will have their Medicare and Medicaid reimbursements slowly reduced by 1% per year until 2018, with further, more stringent penalties coming beyond that time if a sufficiently low number of providers are using electronic health records.

Is all this effort to automate healthcare recordkeeping worth the cost? So far, the results are mixed. Electronic medical recordkeeping systems typically cost around $30,000 to $50,000 per doctor. Only a small amount of funds are available up front. This would burden many providers, especially medical practices with fewer than four doctors and hospitals with fewer than fifty beds. The expenditure of overhauling recordkeeping systems represents a significant increase in the short-term budgets and workloads of health care providers—as much as 80 percent, according to Accenture. Smaller providers are also less likely to have done any preparatory work digitizing their records compared to their larger counterparts.

Implementing an EMR system also requires physicians and other health care workers to change the way they work. Answering patient phone calls, examining patients, and writing prescriptions will need to incorporate procedures for accessing and updating electronic medical records. Paper-based records will have to be converted into electronic form, most likely with codes assigned for various treatment options and data structured to fit the record’s format. Training can take up to 20 hours of a doctor’s time, and doctors are extremely time-pressed. Your doctor may be spending a considerable of time entering your previous medical history to an EMR. In order to get the system up and running, physicians themselves may have to enter some of the data, taking away time they could be spending with their patients. A study of 49 physician practices in Massachusetts showed an average loss of nearly $44,000 over five years, even though these practices received free EHR systems and implementation support. Small practices, especially those that continued to use paper records alongside their EHRs, suffered the greatest losses. Although the cost of recordkeeping was lowered, there were higher ongoing costs for additional physician time.

Many health technology companies are eagerly awaiting the coming spike in demand for their EMR products and have developed a variety of different health record structures. Humana, Aetna, and other health-insurance companies are helping to defray the cost of setting up EMR systems for some doctors and hospitals.

There are two problems with the plethora of options available to health care providers. First, there are likely to be many issues with the sharing of medical data between different systems. While the majority of EMR systems will satisfy the specified criteria of reporting data electronically to governmental agencies, they may not be able to report the same data to one another, a key requirement for a nationwide system. It’s unlikely that the many different types of EMR systems being developed and implemented right now will be compatible with one another in 2015 and beyond, jeopardizing the goal of a national system where all health care providers can share information. No nationwide software standards for organizing and exchanging medical information have been put in place. This means that if you go to one medical practice for a diagnosis, and then go to another hospital to receive treatment, these providers generally will not be able to share your medical records electronically.

The second problem is that there is a potential conflict of interest for the insurance companies involved in the creation of health record systems. Insurers are often accused of seeking ways to avoid or delay paying health care claims. Unfortunately, it is not in their interests to have electronic systems that can process payments too smoothly and efficiently.

The RAND Corporation, which had predicted in 2005 that improvements in information systems could save the U.S. healthcare system $81 billion per year, recently turned more cautious. It found that since 2005, even with an increase in digital healthcare systems, annual U.S. health spending had soared to $2.8 trillion, with only marginal improvements in quality and efficiency. RAND researchers believe the lack of interoperability in electronic health record systems is a major barrier.

Evidence is mounting that electronic health records may be contributing to rising Medicare costs by making it easier for hospitals and physicians to bill for services that were not actually provided, or to bill for services that in the past they did not charge for but are suggested by the EMR. Some electronic health record programs allow doctors to automatically cut and paste the same examination findings for multiple patients or bill for procedures that never took place. More controls and federal oversight are required to make electronic medical record systems produce the results that were originally intended.

Although most insurers are adamant that only doctors and patients will be able to access data in these systems, many prospective patients are skeptical. A May 2012 survey conducted by Harris Interactive found that only 26 percent of U.S. adults wanted their medical records converted from paper to electric. Most of those surveyed worried about the security of electronic records, the potential for misuse of personal information, and the inability of physicians to access patient records during a power or computer outage. Worries about privacy and security could affect the success of EMR systems and quality of care provided. One in eight Americans have skipped doctor visits or regular tests, asked a doctor to change a test result, or paid privately for a test, motivated mostly by privacy concerns. A poorly designed EMR network would amplify these concerns.

Case Study Questions

1- 14 Identify and describe the problem in this case.

1- 15 What people, organization, and technology factors are responsible for the difficulties in building electronic medical record systems? Explain your answer.

1- 16 What is the business, political, and social impact of not digitizing medical records ( for individual physicians, hospitals, insurers, patients, and the U. S. government)?

1- 17 What are the business and social benefits of digitizing medical recordkeeping?

1- 18 Are electronic medical record systems a good solution to the problem of rising health care costs in the United States? Explain your answer.

1. Answer the following

a. Define an information system and describe the activities it performs.

b. List and describe the organizational, people, and technology dimensions of information systems.

c. Distinguish between data and information and between information systems literacy and computer literacy.

d. Explain how the Internet and the World Wide Web are related to the other technology components of information systems.

e. Explain how the Internet and the World Wide Web are related to the other technology components of information systems.

2.2. Briefly explain the following and their business benefits

a. Enterprise systems

b. Supply chain management systems

c. Customer relationship management systems

d. Knowledge management systems

3.3. Answer the following

a.Define BPM and explain how it helps firms become more competitive.

b.Distinguish between BPM and business process reengineering (BPR).

c.List and describe the steps companies should take to make sure BPM is successful.

4.4. Answer the following

a.Define privacy and fair information practices.

b.List and define three different regimes that protect intellectual property rights?

5) Name and describe the three major capabilities of a DBMS.

6) List and describe the components of a contemporary business intelligence infrastructure.

7) What is business continuity planning?

8) What is the business value of security and control? Explain how security and control provide value for businesses.

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